Deal enables Postbank clients to access loans

Through the plan, Postbank – which is currently not allowed by law to offer credit services – is able to extend a loans product courtesy of AAR Credit Services to its 1.7 million clients.

AAR Credit Services Managing Director John Kariuki said they started a pilot project in October and are now processing over 1,000 loans per month.

“We currently are receiving 1,600 applications every month. In December, we expect to have lent over Sh1 billion, and we have sufficient credit lines for the next 12 months to lend up to Sh2 billion,” Mr Kariuki affirmed.

Postbank’s Managing Director Dr Nyambura Kiogi said discussions were underway with the government to allow the institution to become a lending facility.

“The government has agreed to start restructuring. The re- structuring process takes a long time, being a Parliamentary process. I don’t know when it will be finalized. At the moment we want to serve Kenyans,” Dr Koigi said.

She said that the new product had been well received in the market. “In the limited period that the service has been on pilot in our branches, we have seen the loan portfolio grow, showing a clear demonstration and affirmation of the need for credit services by Postbank customers.”

Mr Kariuki said the loans were mostly benefiting the Small and Medium Enterprises sector, with customers taking loans from between Sh25,000 and Sh40,000.

He said the niche in the market is that most banks are not willing to lend small amounts and hence why the product has been so well received in the sector.

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Nderitu Ndegwa With a Minor in English Literature and in his final year in pursuit of Journalism with Broadcasting as his Major, Nderitu is in charge of the Tourism docket on the Business desk. Nderitu loves a good